Many times a customer takes an unsecured business loan to fulfil his business needs, without having any thing as a guarantee. This means that the customer will get a loan, without any guarantee of any property or thing. This is the most suitable place to explain what a working capital loan is. These loans are taken so that the day-to-day operations of the company, which include expenses, rent of the company, salaries of employees and loans. Many times companies do not have enough funds or assets for functional cost and this is where small business working capital loans of short duration come in handy.
Today’s lenders are more flexible in giving working capital loans to small businesses in India. However, only the most qualified business owners are considered eligible for the loan and will have to provide some guarantee to get the loan.
The needs of such loans are a challenge for small scale businesses, who do not want to put their assets at risk. This is the place where lenders come in, who provide working capital loans immediately without any guarantee.
It is easy to get unsecured business loan because less preparation has to be done for this. But still there are some ways for which you can get unsecured business loan in India.
Find your future cash flow projections
Before applying for a loan, calculate your cash flow estimates so that you know that you have enough money to pay your loan. To apply for a working capital loan, your business must be two years old and the previous year’s sales should be at least Rs 5 lakh. Last year’s ITR is Rs 1.5 lakh and the businessman has a house or business premises. If you are unable to repay the loan, then your credit score will be affected. This will also make it difficult to take a loan in the near future.
Create a good credit score
Maintain a good credit score for low interest on working capital loans. This is normal for small, medium and small scale industries because they are difficult to get such loans due to lack of funds. To increase your credit score, you will need to decrease your credit utilization ratio. It shows the total loan which is currently related to your existing loan.
Strong business plan
If you have not made a strong business plan to apply for unsecured business loan, which includes accounting of financial statements, cash flow projections, business motive and growth strategy, how business will make money, loan reason then Do not worry because very few documents are required to process the loan application.
For working capital loan, documents require PAN card, home and business address, ITR of last two years, nine months statement of banks. Only these documents are required for working capital loan.
Do research on borrowers
Different types of loans: The main objective of our business is to use it for many purposes. This includes increasing working capital and purchasing machinery. Therefore, you can apply for machinery loans, working capital loans (also known as loans that provide working capital and this serves the short term needs of the company), capital loans and term loans.
Qualification: There are many borrowers who look at your business revenue and credit score. But the scale of needs also varies.
How to get a Working Capital Loan
You will be surprised to know how easy it is to get a working capital loan. We process the loan application and the loan comes to your account in just three days. The customer has to provide all the documents with the loan application in one go.
SME Working Capital Loan Interest Rate
The interest rate of an SME loan is based on the term of the loan, the terms of the guarantee and the loan amount. Now you can apply for working capital loan online as well.
Benefits of Unsecured Business Loans
No Guarantee Needed: The biggest advantage of unsecured business loan is that the customer does not have to provide any guarantee for this. It is best for small businesses that do not have enough assets.
Easy loan process: The process of unsecured business loan is straightforward. You can apply for this loan from home, through the lender’s website or online lender policy.
Flexibility: There is considerable flexibility in unsecured business loans. Due to this feature, traders get loans according to their needs and they can repay them with their cash flow.
Less paperwork: Due to less hassle of papers, the process of unsecured business loan becomes easier.
Quick disbursement: Since the scale of eligibility for loans is easy, the owners of small, medium and small industries get such loans in a short time. When you need it most, you can take an unsecured business loan or in other words, a personal loan. The loan amount is processed quickly and comes into the account and your business also keeps running smoothly.